Selling to the People’s Republic of China: Privately-Owned Enterprise Generally Pay Suppliers Faster than State-Owned Enterprises
Privately-Owned Enterprises Generally Pay Suppliers Faster than State-Owned Enterprises
Abstract
Many international businesses view Chinese (Note 1) companies as potential customers to expand exports and reach a large, emerging market. Unlike most developed nations, a significant portion of Chinese businesses are majority government-owned. Consequently, international businesses face a choice between partnering with state-owned enterprises (SOEs) or privately-owned enterprises (POEs) in China. This study analyzes financial data from Chinese firms to examine whether SOEs or POEs generally pay suppliers more quickly, a crucial factor to consider before exporting goods or services to China. We find that POEs, overall, exhibit significantly smaller days payables outstanding, indicating quicker payments to suppliers by those companies.
Copyright (c) 2026 Benjamin Foster, Nan-Ting Chou, Andrew ManiKas
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